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EDITOR’S COMMENT: They are missing the point in many cases. It is not the the monetary settlement that these people are entitled to so much as the house itself because the foreclosure was wrongful. If the amount demanded was wrong, then the right amount should be computed and determined whether the borrower had a right to request a modification. These extra fees and charges were the reason that people gave up and left homes that are rightfully still theirs to occupy and own.



The Justice Department faces the daunting task of tracking down more than 210,000 alleged victims and determining how to compensate them, following last week’s $335 million fair-lending settlement with Bank of America Corp.’s Countrywide unit.

Minority borrowers who suffered the greatest harm from Countrywide’s allegedly discriminatory mortgage-lending practices could be the most difficult to locate, observers say, because they are the victims most likely to have lost their homes to foreclosure and subsequently moved several times.

The landmark case is also the first by the Justice Department that accuses a lender of steering borrowers to more costly mortgages, creating novel and possibly difficult questions on setting monetary payments for some victims. For example, how should the government compensate a family that both lost its home and was unfairly steered into a more costly subprime loan?

The agreement, announced last Wednesday, was the largest residential fair-lending settlement in history. It resolved allegations that Countrywide and its subsidiaries engaged in a widespread pattern of discrimination against black and Hispanic borrowers from 2004 to 2008.

Some borrowers allegedly were charged higher fees and costs. Others allegedly were steered into costly subprime loans, even though they could have qualified for a prime mortgage, the type of loan offered to borrowers with the best credit histories.

As the Justice Department’s settlement administrator begins to track down victims, the recent experience of the Federal Trade Commission, which inked its own settlement with Countrywide last year, offers a possible road map. Bank of America paid the FTC $108 million to settle charges that Countrywide took advantage of more than 450,000 distressed homeowners by inflating the cost of services relating to their defaults.

The FTC began mailing refund checks this summer, but 18 months after the agreement, the agency still holds about 25% of the money because it can’t find some people. Officials there are also concerned that at least some victims haven’t cashed the checks out of worries the refunds are part of a scam. The agency is preparing to conduct another round of searches for remaining victims.

The Justice Department is confident its settlement administrator “will be successful in locating the vast majority of the victims and is committed to ensuring that best efforts are made to do so,” spokeswoman Xochitl Hinojosa said.

Once all found victims are paid, any remaining money won’t be returned to the bank or transferred to government coffers. The funds instead will be distributed to organizations that provide credit and housing counseling in minority communities, Ms. Hinojosa said.

The Justice Department last year reached a far smaller fair-lending settlement with two American International Group Inc. subsidiaries, for $6.1 million, and 78% of the victims received and cashed checks.

Department officials estimate it could take as long as two years for Countrywide borrowers to receive compensation, but they hope to mail payments sooner. Officials cautioned it would take time to locate victims and determine damages.

Assistant U.S. Attorney General Thomas E. Perez, speaking last week, said roughly 10,000 victims allegedly steered into subprime loans will receive more compensation because they suffered the greatest harm, potentially paying tens of thousands of dollars more for their loans.

Other victims charged higher prices or fees will receive compensation that could range from a few hundred dollars to “a couple thousand dollars,” Mr. Perez said.

Write to Brent Kendall at


AHMSI (American Home Mortgage Servicing Inc) purchased substantially all of Option One Mortgage

AHMSI (American Home Mortgage Servicing Inc) purchased substantially all of Option One Mortgage about two years ago. AHMSI is owned by the texas billionaire Wilbur Ross. A number of Option One’s loans are now serviced by SPS, Select Portfolio Servicing, formerly Fairbanks Capital,which changed their name following DOJ sanctions and a 48 million dollar fine. Another entity, Sandhills mortgage or financial, took over the dregs of Option One’s business not purchased by AHMSI. I am not sure of Wells Fargo part in this scheme.

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